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Philip Morris Gets Smoked, Down 14% - Cycle Indicates Capitulation

|Includes: Philip Morris International Inc. (PM)

Philip Morris International (NYSE:PM) traded 14% lower on Thursday morning, after reporting earnings that beat Wall Street expectations for earnings but missed on revenues.

PM reported earnings per share of $1.00 and total revenue of $6.9 billion, compared to analyst expectations of $0.90 and $7 billion. The company updated its FY18 guidance to $5.25 to $5.35, compared to estimates of $5.28. However, they also discussed problems on the Gulf Coast, Russia, and Japan.

In analyzing PM’s weekly chart below, the stock is approaching the end of the declining phase of its current market cycle. This could mean that the stock is capitulating, with a bottom due in the next couple of weeks. The fact that the stock is ending this cycle with a lower price than when it began it means that the trend continues to be negative. Thus, the coming rebound is likely to be temporary.

Philip Morris (PM) Stock Chart with Weekly Bars

For an introduction to cycle analysis, check out our Stock Market Cycles video, or watch the askSlim Market Week show every Friday on our YouTube channel.